Pension Calculator

Why plan for retirement early?

Most people in India do not have a guaranteed pension, and people are living longer. Your savings may need to pay for 20 to 30 years of life after you stop working, while prices keep rising.

Starting early makes the job much easier, because your savings have decades to grow. Every few years of delay can raise the monthly amount you need to save sharply.

How the pension calculator works

• It grows your current monthly expenses by inflation until your retirement date.
• It works out the corpus needed to pay those expenses, rising with inflation every year, until the age you plan for, while the unspent money keeps earning your post-retirement return.
• It grows any savings you already have until retirement and subtracts them.
• It works out the monthly saving that fills the remaining gap by retirement.

For example, a 30-year-old spending ₹50,000 a month today will need about ₹2,87,175 a month at 60 if prices rise by 6% a year. To cover that until 85, earning 7% in retirement, needs a corpus of about ₹7.71 Cr. Saving about ₹33,847 a month from now, at 10% a year, builds it.

Choosing your assumptions

Small changes add up over decades. Try a higher inflation rate or a lower return to see a cautious plan, and aim for the higher number if you can.

A quick rule of thumb

A retirement corpus often works out to around 20 to 30 times your yearly expenses in the first year of retirement, depending on how long you plan for and the returns you assume. In the example above, it is about 22 times.

Use this only as a sense check. The calculator gives a figure based on your own age, expenses and assumptions.

Where to build your retirement corpus

• EPF, if you are salaried, builds a base through regular contributions from you and your employer.
• PPF gives safe, tax-free growth over 15 years or more.
• NPS adds equity exposure and converts part of your savings into a pension.
• Equity mutual funds through a SIP can drive long-term growth for goals decades away.
• Closer to retirement, pension plans and annuities can turn part of your corpus into a guaranteed income.

Don't forget health costs

Medical costs usually rise faster than general inflation and grow with age, so they can drain a retirement corpus quickly. Buying health insurance while you are younger and healthy means waiting periods are over by the time you need it most, and premiums are lower than starting after 60.

Common retirement planning mistakes

• Starting too late and relying on catching up with large savings later.
• Ignoring inflation and planning with today's expenses.
• Withdrawing retirement savings early for other goals.
• Keeping everything in low-return options for decades.
• Having no health cover, so one hospital stay eats into the corpus.

Frequently asked questions